Trump Budget Would Slash Funding For Health, International Organisations

The Trump administration this week proposed drastic cuts in funding for international activities including foreign policy and global health in 2019, while further building up military and big business activities. Programs related to international activities will have to prove their value to American interests and other countries are demanded to pay more, according to the proposed budget sent yesterday to Congress, which is ultimately expected to set about the task of restoring numerous programs.

The White House’s proposed fiscal year 2019 budget is available here [pdf].

It is estimated to add trillions of dollars to the US debt (put off for several years, see explanations here and here), even while slashing numerous basic social programs like health, housing, education, labour, environment, and international diplomacy and assistance.

In the 160-page proposed budget, which is considered a starting point that will change significantly during negotiations over the months to come, the State Department and US Agency for International Development (USAID) would see a 26 percent cut in budget.

Health Funding

Under the State Department and international programs budget, the Geneva-based Global Fund for AIDS, Tuberculosis and Malaria would receive $925 million to complete the 3-year commitment made at the last replenishing conference of the Global Fund. But this is significantly lower than the $1.125 billion request made last year that ended up at $1.35 billion.

It also funds this administration’s 2017-2020 strategy for the President’s Emergency Plan for AIDS Relief (PEPFAR), but cuts it from its enacted 2017 level of $5.67 billion to $4.775 billion.

The budget also mentions providing $2 billion for a range of “life-saving programs” including Geneva-based Gavi, the Vaccine Alliance, and programs against malaria, tuberculosis, polio, and neglected tropical diseases. Gavi would also be cut, from $290 million to $250 million.

But neglected tropical diseases would be maintained at $75 million, and funding for pandemic and emerging threats also would hold steady at $72.5 million.

Separately, the Health and Human Services Department (HHS) would receive a 21 percent cut in its budget over the enacted 2017 level.

But it includes programs aimed at reducing drug prices (see pages 21 and 51). “Many drugs are too expensive for Americans and too many patients continue to be priced out of the medicines they need,” it states, citing price manipulation and the disparity between drug prices in the US and elsewhere in the world. It says drugs are purchased through an “inefficient, opaque maze.”

“Americans unfairly shoulder a disproportionate amount of burden for research and development, allowing foreign governments to achieve better deals for their citizens at the expense of the American people,” it states. “The goal of the Administration’s comprehensive strategy is to address the problem of high drug prices, provide greater access to lifesaving medical products, and to ensure that the United States remains the leader in biomedical innovation.”

The budget points to the Food and Drug Administration approving the highest annual number (1,027) of generic drugs in the agency’s history, and a number other steps. It details ways in which it would make drug expenses lower and more predictable, and prevent manufacturers from rapidly raising drug prices.

“The Budget also proposes to give FDA greater ability to bring generics to the market faster by incentivizing more competition among generic manufacturers,” it says. “The Budget proposes to ensure that first-to-file generic applicants who have been awarded a 180-day exclusivity period do not unreasonably and indefinitely block subsequent generics from entering the market beyond the exclusivity period.”

“The Administration is updating a study from 2004 to analyze drug prices paid in countries that are a part of the Organization for Economic Co-operation and Development,” it said. “HHS, working in conjunction with the Department of Commerce and the U.S. Trade Representative, will develop the knowledge base to understand the unfair disparity between the drug prices in America and other developed countries. The Administration is committed to making the regulatory changes and seeking legislative solutions to put American patients first.”

Public Citizen issued a statement giving some credit to the efforts on drug prices but saying they do not address the underlying problems.

“The Trump administration is failing the litmus test on medicine affordability,” it said. “Will most Americans see health care costs fall significantly as a result of these plans? The answer is no. … There are some positive ideas in the White House budget that could yield some savings for the government (for example, a modest proposal to increase competition among generics, reforms to Medicare Part B reimbursement calculations and measures to help prevent manufacturers from paying inappropriately low rebates under the Medicaid Drug Rebate Program) and patients (out-of-pocket spending caps and eliminating cost-sharing on generics for low-income Medicare beneficiaries). Yet these savings are very small compared to what would be possible if the White House stood up to prescription corporations.”

Commerce Dept. / USPTO

One area that will see growth is the Department of Commerce, which would see a 6 percent increase over the 2017 enacted level. Commerce’s mandate is wide-ranging as exhibited by the priorities the document highlights. “The Budget provides strong support for high priority, mission-critical programs such as the 2020 Decennial Census, trade enforcement, intellectual property, weather and Earth observations, and spectrum management.”

The US Patent and Trademark Office (USPTO) falls under the Commerce Department. USPTO would be authorised to spend 2019 fee collections of up to $3.42 billion, a slight increase from last year. Patent activity receives the lion’s share of spending, more than 10 times that of trademarks, according to the USPTO budget included in the annex to the Commerce Department budget (see page 199).

[Update: The USPTO has now posted its full 151-page budget request here.]

There has been talk of changes to the way the USPTO handles international issues, but it is not clear from this budget. The new director of the Office was just appointed a few weeks ago and it remains to be seen how future budgets will reflect his influence.

It lays out plans in 2019 as such:

“Patent program. — Requested funding for 2019 will be used for examining patent applications and granting patents. USPTO will continue its aggressive patent pendency reduction agenda to reduce overall pendency and backlog; continue to enhance patent quality; ensure optimal information technology service delivery to all users; improve appeal and post-grant processes; and improve intellectual property protections worldwide.

In another area, the budget mentions providing an unspecified amount of “bilateral funding for agriculture-led food security programs.” This will particularly focus on sub-Saharan Africa and will target “resilience” in order to steer away from emergency food and other humanitarian assistance.

It proposes to cut the Agriculture Department funding by 16 percent, and reorganises the department, including the establishment of an Under Secretary of Trade and Foreign Agricultural Affairs to sharpen USDA’s “focus on increasing agriculture exports to foreign markets.”

For the United Nations and other “implementers” of humanitarian assistance, the budget claims to demand improved performance, with greater accountability.

And for multilateral organisations, it states: “The United States will compete and be a leader in multilateral organizations so that American interests and principles are protected. The Administration remains committed to the need for greater transparency and reform in international bodies and for other donors to invest more.” It calls for $2 billion for the UN secretariat and technical agencies, and will leave it to the State Department and others to review how each agency “advances American interests.”

Big Defence

The budget would make sweeping cuts of virtually every department that governs day-to-day society. It would cut the Education Department by more than 10 percent, Housing and Urban Development gets cut by more than 18 percent over 2017 enacted levels, the Interior Department (which manages national parks among other things), would take a 16 percent hit from the 2017 enacted levels, the Labor Department sees a 21 percent cut, Transportation Department a 19 percent drop from 2017 enacted, and the Justice Department declines by 1.2 percent. It reserves its biggest carving for the Environmental Protection Agency, hacking it by 34 percent over the 2017 enacted budget, for instance erasing climate change programs, coastal protection, and proposing to privatize management of the nation’s water supply to citizens. In another area, the Small Business Administration gets a nearly 6 percent cut despite the administration’s avowed pro-business orientation.

Meanwhile, the Defense Department, which already typically consumes some half of the total budget (by 2020 it would exceed 50 percent and keep growing), gets a 13 percent increase, under the banner of “peace through strength,” which appears to have supplanted peace through diplomacy. There would be increases in technological research in areas like artificial intelligence and cyber activities, while also bolstering human staff as well. The Defense chapter is punctuated with slogans such as “Compete-Deter-Win,” and “Innovates at the Speed of Relevance.”

And the Homeland Security Department would get an 8 percent boost over enacted 2017 levels. In a related area, security protection for the “nation’s leaders” would be significantly increased, on its way to its “highest levels ever.”